Microsoft shares were up 3% in late afternoon trading. Pete said the Street appears to be “putting its money where its mouth is” as he sees investors buying upside options calls, particularly the $35 strikes, anticipating a big after-hours move higher. If the tech bellwether posts better-than-expected earnings, Pete said it would likely come from strong Vista and X-Box sales, which in turn could be indicative of the state of the U.S. consumer.

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